The founder of layer-1 blockchain Sonic (S) is speaking up about his decision to step away from crypto in 2022, two years after launching the decentralized finance (Defi) platform Yearn Finance (YFI).
In a post on Medium, Andre Cronje says he stopped his public engagement with DeFi because of regulatory pressure.
[adinserter block="1"]He says it all started in 2021 when the U.S. Securities and Exchange Commission (SEC) sent him a letter asking for more information on YFI, including whether he raised funds and who the investors were.
Cronje says he complied and provided as much information as he could provide, but the SEC continued to send him letters that later became hostile in tone. The regulator investigated him on different issues, including violations, which Cronje says confused him because he is not a US citizen or resident and he neither sold anything to anyone in the US.
“The letters kept coming, every time pivoting to a new angle of attack. It started ‘investigating’ me from the angle of a raise and SEC violation… When it became apparent that [the raise] was not an angle of attack, it shifted to focusing on the yearn vaults themselves as ‘investment vehicles’.”
Cronje says the time and effort it took him to answer the questions from the regulator diverted his attention.
“At this point, I was practically forced to completely stop development or R&D, and focus solely on this legal and regulatory battle.”
He says the sleepless nights and stress of the ordeal prompted him to quit.
“All in all this took 2 years of my life and finally culminated in a point where I was essentially given a choice. I can keep trying to build things for free, receive no benefit, spend hours of my energy and time to release this code into the wild, while needing to constantly face these attacks and have to spend months of my life and real money to defend it. Or I need to step away.”
Cronje says he is now sharing his experience as the SEC takes a new direction.
“I finally figured I can actually write about this, as previously I was strongly advised by those same investigators to not mention the investigation or it could escalate things.”
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